Rodriguez v. Compass Shipping Co. Ltd.

• Decision Date: 19 March 1980
• Docket Number: No. 362,D,362
• Citation: 617 F.2d 955
• Parties: Frederico RODRIGUEZ, Plaintiff-Appellant, v. COMPASS SHIPPING CO. LTD. and Djakarta Lloyd, P.N., Defendants-Appellees. ocket 79-7132.
• Court: U.S. Court of Appeals — Second Circuit

Page 955

617 F.2d 955

Frederico RODRIGUEZ, Plaintiff-Appellant, v. COMPASS SHIPPING CO. LTD. and Djakarta Lloyd, P.N. Defendants-Appellees.

No. 362, Docket 79-7132.

United States Court of Appeals Second Circuit.

Argued Dec. 6, 1979.

Decided March 19, 1980.

Morris Cizner, New York City (Zimmerman & Zimmerman, New York City, of counsel), for plaintiff-appellant.

Joseph T. Stearns, New York City (William J. Blumenschein, Walker & Corsa, New York City, of counsel), for defendants-appellees.

Before WATERMAN, MOORE and MANSFIELD, Circuit Judges.

MANSFIELD, Circuit Judge:

This is one of a series of personal injury actions by longshoremen against shipowners or charterers, nearly all of which have been dismissed by district courts pursuant to § 33(b) of the Longshoremen's and Harbor Workers' Compensation Act (the Act), 33 U.S.C. § 933(b) on the ground that since the plaintiff in each case settled a compensation claim filed by him against his employer (a stevedoring company) under the Act, accepted the agreed-upon sum, and failed to sue the shipowner until more than six months after the settlement award, he lost his right to assert the claim which was by operation of § 33(b) automatically assigned to his employer. See also Panzella v. Skou, 471 F.Supp. 303 (S.D.N.Y.1979); Francavilla v. Bank Line, Ltd., 470 F.Supp. 94 (S.D.N.Y.1979); Perez v. Arya National Shipping Line, Ltd., 468 F.Supp. 799 (S.D.N.Y.1979); Hernandez v. Costa Armatori, 467 F.Supp. 1064 (E.D.N.Y.1979); Perez v. Costa Armartori, 465 F.Supp. 1211 (S.D.N.Y.1979); Bandy v. Bank Line, Ltd., 442 F.Supp. 882 (E.D.Va.1977).

Section 33(b) provides that

"(b) Acceptance of (statutorily fixed) compensation under an award in a compensation order filed by the deputy commissioner or (Benefits Review) Board shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award."

An employer successfully bringing suit against a third party following a statutory assignment must pay the proceeds to the employee, keeping for itself the amount of compensation it paid, attorney's fees, and 20% of the balance. 33 U.S.C. § 933(e). If the employee brings suit himself, he must repay his employer out of the proceeds, retaining the balance of the damage recovery. The Etna, 138 F.2d 37, 41 (3d Cir. 1943).

Plaintiff contends that since his claim under the Act was not the subject of a formal compensation order filed by the deputy commissioner or Board no assignment occurred and his action is neither precluded nor time-barred. He further argues that, even assuming an assignment, since the employer has no intention of prosecuting the claim against the shipowner any assignment of his claim under the terms of the Act must be treated as null and void because of a conflict between his interest and that of his employer. We disagree on both counts and affirm.

On September 4, 1973, plaintiff, a longshoreman employed by the stevedoring company International Terminal Operating Co., Inc. (International), was injured while unloading the S.S. South Breeze, docked in Brooklyn, which was owned by Compass Shipping Company and operated by Djakarta Lloyd as bareboat charterer. Pursuant to § 5(b) of the Act, 33 U.S.C. § 905(b), he filed a workmen's compensation claim against his employer International, which was self-insured, with the Office of Workers' Compensation Programs (OWCP), U.S. Department of Labor. The statute provides for compensation in fixed amount by the employer regardless of fault.

Under regulations implementing the Act, see 20 C.F.R. §§ 702.311-314, a claims examiner employed by the Department of Labor convened an informal conference. At the conference plaintiff and his employer reached an agreement settling plaintiff's claim, which was then memorialized in a written agreement dated November 4, 1974, on an OWCP form regularly used for this purpose. Plaintiff was represented by counsel throughout the OWCP proceedings, the employer had its representative, and the matter was handled by the claims examiner pursuant to 20 C.F.R. § 702.312 which authorizes an informal conference to be called by the deputy commissioner or his designee. Title 20 C.F.R. § 702.312, which has since been revised, provided:

" § 702.312 Informal conference; called by and held before whom.

"Informal conferences shall be called by the deputy commissioner or his designee assigned or reassigned the case and held before that same person, unless such person is absent or unavailable. When so assigned, the designee shall perform the duties set forth below assigned to the deputy commissioner."

The settlement agreement was signed by the plaintiff, his representative, the employer's representative and the claims examiner. The parties agreed as to the extent of plaintiff's disability, the amount of money due him and the amount of his counsel's fee. Payment of the agreed-upon amount was made promptly by the employer to plaintiff pursuant to the terms of the agreement. Title 20 C.F.R. § 702.315, as it read at the time of the settlement, obligated the employer to commence paying the compensation benefits immediately, without regard to whether the deputy commissioner, acting personally or through his designee, see 20 C.F.R. § 702.312, supra, had filed a formal compensation order, which he was required to do. Title 20 C.F.R. § 702.315 provided:

" § 702.315 Conclusion of conference agreement on all matters with respect to the claim.

"(a) Following an informal conference at which agreement is reached on all issues, the deputy commissioner shall embody the agreement in a formal compensation order, to be filed and mailed in accordance with § 702.349. Where the problem was of such nature that it was resolved by discussion by telephone or by exchange of written correspondence, the parties shall be notified by the same means that agreement was reached and then the deputy commissioner shall proceed to prepare, file and mail the formal compensation order. In either instance, when the employer or carrier has agreed to pay, reinstate or increase monetary compensation benefits, or to restore or appropriately change medical care benefits, such action shall be commenced immediately upon becoming aware of the agreement, and without regard to the receipt of the formal compensation order."

Following the execution of the settlement agreement, neither the deputy commissioner nor his designee filed and mailed a formal compensation order.

On July 2, 1977, plaintiff commenced the present action in the Southern District of New York against the shipowner (Compass Shipping Co. Ltd.) and bareboat charterer (Djakarta Lloyd, P.N.) after an earlier suit had on June 2, 1976, mistakenly been instituted in the same court against the shipowner only and was apparently dropped. On April 21, 1978, the defendants moved for summary judgment based on plaintiff's failure to sue within six months of the settlement agreement as required by 33 U.S.C. § 933(b).

On September 12, 1978, Judge Carter filed an opinion, 456 F.Supp. 1014, holding that the settlement agreement amounted to an order within the meaning of § 33(b), requiring plaintiff to sue within six months unless he could show that that section should not be applied because of a conflict of interest between himself and his employer with respect to the institution of a personal injury suit against the shipowner or charterer, see Czaplicki v. The S.S. Hoegh Silvercloud, 351 U.S. 525, 76 S.Ct. 946, 100 L.Ed. 1387 (1956). Plaintiff was given 60 days within which, through use of discovery proceedings, to demonstrate a conflict. When plaintiff failed to adduce evidence other than his attorney's affidavit to the effect that the employer had a policy of not prosecuting actions based on a § 33(b) assignment, the district court granted summary judgment, dismissing the complaint on the ground that plaintiff's rights against the defendant had been assigned to his employer pursuant to § 33(b) by reason of his failure to bring suit against them within six months after the settlement. From this judgment plaintiff appeals.

DISCUSSION

Appellant's threshold contention that defendants have no "standing" to raise the assignment defense because the shipowner's liability is unaffected by the assignment need not take us long. The argument is clearly without merit.

The defense raised by the defendants, that plaintiff is not the real party in interest, may always be invoked pursuant to F.R.Civ.P. 17(a), which provides that every action shall be prosecuted in the name of the real party in interest. Without this defense a defendant might be exposed to multiple suits based on the same claim. United Federation of Postal Clerks v. Watson, 133 U.S.App.D.C. 176, 184 & n. 34, 409 F.2d 462, 470 & n. 34 (D.C.Cir.), cert. denied, 396 U.S. 902, 90 S.Ct. 212, 24 L.Ed.2d 178 (1969). A person, such as the employer here, to whom a claim has been assigned under § 33(b), is the real party in interest. Aetna Life Ins. Co. v. Moses, 287 U.S. 530, 53 S.Ct. 231, 77 L.Ed. 477 (1933); Moore v. Hechinger, 75 U.S.App.D.C. 391, 127 F.2d 746 (D.C.Cir.1942). Assuming the assignment here to be valid, the right to sue is exclusively that of the employer, which has not joined in the action or ratified its commencement even though it has had a reasonable time to do so. The defense of assignment therefore is properly asserted as a procedural matter by the defendants.

Turning to the merits, the first question is whether the settlement agreement amounted legally to an "award in a compensation order" of the deputy commissioner or (Workmen's Compensation) Board within the meaning of § 33(b), triggering its assignment provisions. Plaintiff first argues that the award must be approved by the deputy commissioner and that a claims examiner will not suffice. We disagree.

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